Debt Free Article

Debt Terms Glossary

Letter T

Technical analysis

Debt free fans rely on these a lot. This is an approach to market analysis that tries to determine future price points by taking a close look at charts (financial and debt) to find patterns from past reports. These patterns include debt ratios, debt standings, credit card debt and many other facets in the financial world.

Tender offer

This is an offer to shareholders to purchase their existing investor shares in a specific company. These offers are typically a vital constituent of a strategy to take over, or buy out a company or debt. Many times tender offers are attractive because they are higher valued than the marker price.

10-k

This is not a debt free race. It is a detailed financial report that has to be filed legally with the SEC every year by all companies that trade openly on the market. Think of it as a type of annual report if you will.

Term insurance

This is an important part of many of our debt consolidation, or debt free clients are familiar with. It is the most basic style of life insurance that is carried by some of the debt free wannabes that read this site. With this type of insurance, you are insuring your life for a certain amount of money for a certain period of time. This is an inexpensive form of life insurance that some individuals struggling with debt use to cover their debt should they die. The premium on this type of insurance is purchased based on your age and the amount of coverage you need.

Total return

This well used debt term describes an investment performance measure that mixes two different aspects – any changes in the price of the shares and any dividends or other pay outs the shareholder gets during the period of measure. So, if you are a debt free investor who gets a total return on a utility stock that gained 4% over a 12 month period that paid a dividend of six percent would be 10% - as figured in the form of percentage on the investor’s initial investment. Additionally, in the world of mutual funds, the total return phrase assumes that dividends and even capital gains are invested back into that fund.

Totten trust

Not to common in the world of debt free living this term describes a regular bank account that has a designated pay on death inheritor. It is actually an easy form of a revocable grantor trust. It is often utilized to save money on funeral expenses. It should be something our debt clients know more about as it saves them from additional debt after death.

Trust

This is an arrangement where you give assets to a legal individual/company or being (known as the trust) that is made in order to be a separate deal to be administered by an individual or company trustee for a beneficiary. Often times trust are set up for minors in the case of unplanned parental death(s). The account (assets) are set up to pay upon legal maturing. There are several types of trusts. Revocable, irrevocable and such.

12b-I fees

This is an extra fee that is charged by some mutual funds to cover the costs involved in promoting them. In theory, this fee is many times utilized to repay brokers for selling low load and no load funds. Debt free advocates know about this fee and many think they are hidden fees much like those from credit card debt. In actuality, the story with this fee is that it is actually reflected in the reported performance rating of the funds it is charged to, so it is not hidden per se. Interesting fact though we think.

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